Gwin v. Liberty Mutual Insurance Co.

BRANDON GWIN AND AMIE GWINv.LIBERTY MUTUAL INSURANCE COMPANY AND USAA INSURANCE COMPANY

KAREN
L. HAYES MAG. JUDGE.

RULING

ROBERT
G. JAMES UNITED STATES DISTRICT JUDGE.

This is
a dispute over homeowner's insurance benefits. Defendant
Liberty Personal Insurance Company (“Liberty”)
issued a homeowner's insurance policy to Plaintiffs
Brandon Gwin and Amie Gwin, effective March 12, 2016, to
March 12, 2017. However, on July 6, 2016, Liberty rescinded
the homeowner's insurance policy for alleged
misrepresentations by the Gwins. The Gwins subsequently
brought suit against Liberty.

Pending
is Liberty's Motion for Summary Judgment [Doc. No. 12].
For the following reasons, the Motion for Summary Judgment is
GRANTED.

I.
Facts and Procedural History

The
Gwins owned a home located at 187 Sonny Road, Monroe,
Louisiana. On May 16, 2015, Garrison Property and Casualty
Insurance Company (“Garrison”) issued a policy of
homeowner's insurance, bearing policy number GAR 01563 68
28 90A, to Brandon Gwin for the Sonny Road
home.[1" name="FN1" id=
"FN1">1]

Effective
December 16, 2015, Garrison cancelled the policy it issued
for non-payment.[2]

On or
about March 10, 2016, record rainfall in the Monroe region
caused widespread flooding. The Gwins evacuated their home
that day.

The
following day, March 11, 2016, Amie Gwin contacted Garrison
about the homeowner's policy to ensure that the Gwins
were covered for damage other than flooding. Mrs. Gwin told
the representative during the call that the home was flooded
or was going to flood. It is undisputed that she was told by
a representative that the Garrison policy was cancelled in
December 2015. It is also undisputed that she was informed
that USAA and all its subsidiaries (including Garrison) were
unable to re-write similar coverage on the Sonny Road
property because of the “unrepaired damage, ”
which was “not cosmetic, ” after Mrs. Gwin had
disclosed the current or imminent flooding situation. [Doc.
No. 12-1, Exh. 5].

The
same day, Mrs. Gwin called Liberty seeking to obtain a
homeowner's insurance policy. As part of the application
process, Mrs. Gwin was required to provide certain
information. When asked, she knowingly and falsely denied
having any homeowner's policy cancelled, declined, or
non-renewed in the past year.[3] In fact, she told the
representative that her Garrison Policy did not expire until
August 31, 2016, which was not true.

According
to Liberty's transcript of the call, Mrs. Gwin also
failed to disclose that her home had flooded, even when asked
if the area was prone “to flood or earthquakes.”
[Doc. No. 12-1, Exh. 8(A) at Liberty-1559].[4] Mrs. Gwin claims
that she did disclose this information, but has no evidence
other than her recollection. During the call, Mrs. Gwin also
denied, despite the known damage from flooding, that she was
“doing any sort of construction or remodeling” or
that there were any “physical conditions . . .[at the
home] that can cause injuries like broken windows, uneven
walkways, along those lines[.]” [Doc. No. 12-1, Exh.
8(A), at Liberty-1560].

After
the telephone call, Brandon Gwin electronically signed a
written application that also answered “no” to
the question whether he had ever had a homeowner's policy
cancelled, declined, or non-renewed; denied that the home was
“[u]nder construction” or “[u]ndergoing
significant renovation or remodeling, ” and denied that
there were “any physical conditions . . . in need of
repair which clearly present a likelihood for injury[,
]” such as “[p]orch or deck without adequate
rails or supports, severely broken walkways, unfenced
swimming pools, trampolines, etc.” [Doc. No. 12-1, Exh.
8(A), at Liberty-161; Exh. 1, at 79:10-17, 72:13-73:24 &
78:22-79:9].

The
Liberty application Mr. Gwin signed contained the following
warning:

[I]t is agreed that this form and the answers provided by you
to questions asked as part of the application process shall
be the basis of the contract should a policy be issued. In
the event that any material misrepresentations,
omissions, concealment of facts and/or incorrect statements
are made by or on behalf of the insured during the
application process, we may exercise whatever legal remedies
may be available to us under the laws and regulations of this
state.

Liberty
issued homeowner's insurance policy no. H3F-298-106767-70
(“the Policy”) to the Gwins, effective March 12,
2016, to March 12, 2017. The Policy contains a provision on
concealment or fraud:

2.
Concealment Or Fraud

a.
Under Section I - Property Coverages,

(1) With respect to loss caused by fire, we do not provide
coverage to the “insured” who, whether before or
after a loss, has: (a) Intentionally concealed or
misrepresented any material fact or circumstance;

(b) Engaged in fraudulent conduct; or

(c) Made false statements relating to this ...

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